In Today’s News:
- Pakistan to remain on FATF ‘greylist’.
- India GDP to contract 4.5% on COVID-19 says IMF.
- RBI will supervise cooperative banks.
1. Pakistan to remain on FATF ‘greylist’
FATF has extended the ‘greylist’ status for Pakistan. FATF plenary session has decided to continue to keep all countries that were on the list under scrutiny for Terror Financing and Money Laundering until October 2020.
Prelims GS – International Relations
Refer prelims content of FATF on 20th June 2020.
Lists of FATF:
FATF has 2 lists. They are:
- Countries knowns as Non-Cooperative Countries or Territories (NCCTs) are put in the blacklist.
- These countries support terror funding and money laundering activities.
- The FATF revises the blacklist regularly, adding or deleting entries.
- Eg: North Korea, Iran
- Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list.
- This inclusion serves as a warning to the country that it may enter the blacklist.
- Eg: Pakistan
Mains GS2 – International Relations
Consequences of Greylist for the countries:
- Economic sanctions will be imposed on the Greylist countries from the IMF, World Bank, and ADB.
- Those countries cannot get loans easily from IMF, World Bank, ADB, and other organizations.
- In these countries, there will be a reduction in international trade
- Also, there will be an international boycott on these countries.
Click here to view the official website of FATF.
2. India GDP to contract 4.5% on COVID-19 says IMF.
IMF has predicted that India’s GDP will contract 4.5% this year due to the severe impact of COVID-19 pandemic. IMF has said this in its World Economic Outlook report. Also, the IMF has predicted that there will be loss of jobs and geopolitical tensions will be there between the world’s largest economies.
Prelims GS – International Relations
- The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
- Established in 1945.
- The IMF provides loans to member countries experiencing actual or potential balance of payments problems to help them rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth while correcting underlying problems.
- The IMF’s primary aim is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.
- India is a member of the IMF from 1945.
- Reports of IMF:
- World Economic Outlook (2019 Prelims Question)
- Fiscal monitor Reports
- Global Financial Stability Report
NOTE: These points are directly taken from the IMF website for better understanding as UPSC has asked the exact statements mentioned above.
For more information on IMF, visit the official website.
3. RBI will supervise Cooperative Banks
The Union Cabinet approved an ordinance to bring all the urban and multi-state cooperative banks under the supervision of the RBI. Now the supervision process of RBI on scheduled banks will be applicable to the cooperative banks. This will protect the interests of depositors and more security is ensured for the depositors.
Prelims GS – Economic Development
- Co-operative banks are financial entities established on a co-operative basis and belonging to their members.
- That is, the customers of a co-operative bank are also its owners.
- The aim of the cooperative banking system is to promote saving and investment habits among people, especially in rural parts of the country.
- Previously the RBI and the state government jointly regulated Cooperative banks.
- After the Punjab and Maharashtra Cooperative Bank crisis (PMC bank crisis), where the depositors were unable to access their savings, the government has taken this move of bringing cooperative banks under the complete supervision of the RBI like the Scheduled Banks.
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